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With the release of Windows 8 approaching, Microsoft is making a bid for the attention of existing Windows users by streamlining and lowering the cost of upgrading.

PCs running Windows XP, Windows Vista or Windows 7 will be able to upgrade to Windows 8 Pro via online download for $39.99, with an option to add the Windows Media Center living room interface for free. A packaged DVD version will be available in stores for $69.99. Both promotions run through Jan. 31, 2013.

The company announced the plan yesterday along with a simplified process for downloading and installing the new operating system. (Microsoft hasn’t yet announced a release date for Windows 8.)

Will it work? One commenter wrote on the Microsoft blog post, “At that price, I don’t see how I can’t buy a copy. I was expecting to shell out $200 for Windows 8 Pro. This should certainly increase adoption from previous versions of Windows.”

Others aren’t so sure. “We think there will be little interest in moving existing PCs to Windows 8, with most interest likely in buying new touch enabled hardware to take full advantage of the new touch interface,” wrote Wall Street analyst Rick Sherlund of Nomura Research in a report about the upgrade terms. He isn’t changing his financial models for the company as a result of the new details.

My take: The upgrade offer could be interesting to people running Windows XP on older computers. I’ve been testing Windows 8 on an old IBM (yes, IBM) ThinkPad with 1GB of RAM. The machine was originally designed to run Windows XP, but thanks to Microsoft’s ongoing improvements, I’ve noticed a significant boost in responsiveness and boot time with Windows 8.

Windows 8 could be a tougher sell for people running Windows 7, where the performance improvements aren’t as significant. The keyboard-and-mouse experience with Windows 8 will require an adjustment. Windows 8’s tile-based “Metro” interface is best on touch-enabled tablets. Particularly if they’re running Windows 7 machines that aren’t touch-enabled, my hunch is that most users won’t see the upgrade as worthwhile.

Now that the upgrade process and price are clear, what’s your plan? Vote in our poll below.

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